I by IMD Magazine - Preview Issue II

YOUR BUBBLE NEW NETWORKING COMPASSION

SELF-REFLECTION

EAT TOGETHER

AMAZON'S TRANSITION

SHARED VALUES

INCLUSION

EXPRESS APPRECIATION

COLLECTIVE ACTION

GET OUT OF

EMPATHY CRYPTO MAINSTREAM SET BOUNDARIES

MANAGE WORKLOAD

CHINA CLIMBS RANKS INTENTIONAL BREATHING BE CURIOUS

#02 June 2021

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[ Foreword ]

Let’s face the future together

W

e don’t yet know all the ways in which the post-pandemic world will be different, but heightened awareness of the importance of mental health and wellbeing – not merely as societal challenges, but as a managerial imperative – are certain to be among them.

“Wellbeing and mental health are far more of a social function than a set of solo acts,” writes Zoe Finch Totten in her article in this second issue of I by IMD. We spend more time at work than just about anywhere else – whether virtually or in person – and our work social context matters profoundly for our wellbeing.

Companies have taken notice. Anand Narasimhan surveys what organizations are doing to encourage wellbeing in their employees, noting that initiatives designed to improve work-life balance are estimated to cost $66bn a year, a figure that will only grow in the wake of the pandemic. Given what is at stake, how can we make that kind of investment most effective?

Illustration: Jörn Kaspuhl

To help, we have commissioned experts in management, health, corporate structure and even an adventurer to help analyze the problems we face right now and to sketch solutions.

Alyson Meister and Dominik Breitinger offer a roadmap to avoid burnout. They guide us through the practical steps that can be taken - by individuals, team leaders and organizations – to restore harmony to the workplace.

We also explore one paradox of the pandemic: that even those who have been successful in business during this period are suffering from lockdown fatigue. Merete Wedell-Wedellsborg

explores the phenomenon and offers guidance on how winners can return to top form.

“The test of a civilization is the way that it cares for its helpless members,” the American novelist Pearl Buck once wrote. As some of us already enjoy the benefits of COVID-19 vaccines, largely because of where we happen to live, the question is what we do next. We won’t move clear of this pandemic until effective vaccines are available everywhere, to anyone, regardless of means. This pragmatic and deeply humanitarian insight has fueled AstraZeneca’s vaccine development efforts. Despite recent challenges, chronicled in this issue by Tobias Schlager, the company has not wavered from its commitment to supply vaccines at cost, charging less than a 10th the cost charged by its peers.

AstraZeneca is symptomatic of another imperative as we march towards the post-pandemic world – that business needs to become more inclusive. Take inspiration from Alexis Nasard who tells IMD President Jean-François Manzoni: “I really believe in the virtues of inclusive capitalism; when shareholders, management, employees, communities, consumers, distributors and governments win together. It's much better for the environment, and it's much more sustainable economically.”

As we look ahead, and reset for growth, let us leave no one behind.

David Bach, Dean of Innovation and Programs at IMD June 2021 • I by IMD 1

[ CONTENTS ]

24 [ Wellbeing at work ]

04 [ In good company ] Jerry Davis finds himself in bad company, asking whether some

From sleep pods to yoga and fitness trackers, the corporate world is investing billions of dollars in improving employees’ health and welfare, but organizations must take care to avoid accusations of “soul washing”, argues

06 [ Conversation piece ]

28 [ Wellbeing at work ]

business models are truly evil.

The aeronaut, environmentalist and psychiatrist Bertrand Piccard sees a chance for a global reset in the wake of the pandemic.

10 [ The number crunch ]

AstraZeneca faced a storm of negative publicity over its COVID-19 vaccine following reports of potentially fatal blood clots in rare cases. Tobias Schlager examines the data and explains what the company could have done to change the narrative.

Anand Narasimhan.

Success in business is normally an energizer, but even senior executives who have emerged triumphant from the pandemic have been left feeling gloomy. Merete Wedell-Wedellsborg suggests ways that they can recover their mojo.

28

Humans are social animals yet support for mental health focuses on the individual. Zoe Finch Totten argues that a radically different approach is needed to combat an increase in loneliness and isolation and a fall in productivity.

18 [ Wellbeing at work ]

Declining mental health is a global crisis. Alyson Meister and Dominik Breitinger offer practical guidance for individuals, team leaders and organizations on ways we can tackle it.

23 [ In the mind’s eye ] Regular columnist George Kohlrieser says that individuals

06 2 I by IMD • June 2021

must take responsibility for their personal troubles and not solely rely on the help of others.

34 31 [ The CEO interview ]

In an interview with Jean-François Manzoni, Alexis Nasard explains why he believes in the benefits of inclusive capitalism to create a society where everyone can be a winner.

34 [ Human resources ]

Former banker Jeroen Harderwijk runs a sustainable safari business in the Serengeti. He tells of his mission to empower the local community, particularly women.

38 [ New frontiers ]

Kholisile Khumalo has set up a scuba diving academy for young Black South Africans. The only problem is that many are scared of the water and can’t actually swim.

Photos: www.miklosszabo.com, Joel Saget/AFP via Getty Images, Mercedes Bailey (Asilia Africa), Kathleen Prior

12 [ Wellbeing at work ]

41 [ Office Life ]

Alyson Meister, in her regular column The Help Desk, uses the latest research

to help solve problems faced at work.

42 [ Managing change ]

12

From theaters to museums, cultural institutions have been hard hit by the COVID-19 pandemic.

Michael Day conducted a wide range of interviews with cultural leaders to see how they coped.

46 [ Strategy briefing ]

The dramatic fall of the British supermarket giant Tesco should act as a warning for other customerfocused giants, including Amazon, write Charlie Dawson and Seán Meehan.

41

Illustration: Jörn Kaspuhl, Photos: Michele Crosera, Momo Productions via Getty Images, Steven Frink, Getty Images

42

48 [ The leading edge ]

Jeff Bezos is facing a tricky transition from CEO to Chairman of the Board at Amazon. Didier Cossin and Michael Watkins offer advice on how to avoid the pitfalls of such a move.

50 [ World view ]

China is the world’s second-biggest economy, but lags behind when it comes to business competitiveness. Arturo Bris explains why.

53 [ The business case ]

To avoid becoming obsolete, companies need a clear sustainability plan, write Knut Haanaes, Frédéric Dalsace and Jules Wurlod.

56 [ The forecaster ]

In his regular column, Howard Yu gazes into his crystal ball to identify four trends that are likely to outlast COVID-19.

31

38

60 [ Phil’s book club ]

62 [ Counterpoint ]

Phil Rosenzweig discusses books on

data gender bias and a memoir

by Disney CEO Robert Iger in the first of a new series.

The current trend of banning art and books in the name of “correct thinking” is a crime against liberty, argues Josef Joffe June 2021 • I by IMD 3

[ In good company ]

Are some business models plain evil?

Ransomware for profit, the opioid scandal, and children enticed into vaping.

We need to find a way to stop businesses preying on humanity, argues Jerry Davis

DarkSide, the organization behind the hack, did not carry out the attack itself. Instead, it is a business service provider that creates tools for hackers that it makes available for a fee, a sort of Amazon Web Services for extortion. DarkSide's business model was immediately dubbed "ransomware-as-a-service" (RaaS), paralleling other new business models such as software-as-a-service (SaaS), platform-as-aservice (PaaS), and infrastructure-as-a-service (IaaS).

Hacking an organization's servers and holding its data for ransom is not new, although it has become a much bigger business in recent years.

But DarkSide stood out for what can only be called its professionalism.

It has a help desk for its unwilling "customers" and a detailed interview process to screen its team members and business partners, with whom it splits the proceeds. To ensure that there is honor among thieves, members of the ransom-hacker community apparently rely on escrow accounts and an online "hacker court" to adjudicate business disputes.

Moreover, DarkSide has a code of ethics: no hacks on hospitals, schools, or nonprofit organizations. It also claims to donate some of its profits to charity. In many ways it looks like any other contemporary business service provider. Indeed, some of the most troubling businesses have been among the most generous philanthropists. Tobacco vendors Phillip Morris and R J Reynolds were long-time patrons of the arts; the name 4 I by IMD • June 2021

Sackler graces countless art galleries, medical facilities, and research institutes around the world thanks to donations from the family whose business developed and marketed the highly addictive painkiller OxyContin, fueling the opioid crisis.

This raises several questions. Are there business models in use that are intrinsically, well, evil? How would we recognize a company that had an intrinsically evil business model? (Let's call it an EBM.) Is there a clear dividing line between intrinsic and incidental evil? Are some economic systems more prone to EBMs? And is there any amount of "corporate social responsibility" that can absolve an EBM? Any kind of business can be subject to incidental evil. An enterprise might be in the business of providing delicious chocolate for children, or seafood-flavored food for kittens, and discover that the cacao farms at the start of their supply chain rely on child labor, or the shrimp in their cat food is harvested by enslaved workers. Of course, any responsible business in this situation would quickly move to eliminate such human rights abuses and take steps to ensure that their supplier labor practices meet the highest global standards. Here the problem is not the business model but its implementation. (Unless vending delicious empty calories somehow counts as being compromised.)

And some evaluations of evil change over time. There are many businesses today that would have been regarded as immoral in previous times and places, such as growing and distributing cannabis or Grindr, the geosocial app for LGBTQ+ people. Likewise, there are businesses that were respectable in the past but troublesome today, such as tobacco. And there are surely current businesses that the future will regard as unconscionable, perhaps cattle production or air travel.

Illustration: Jörn Kaspuhl

A

ransomware attack that shut down a major US oil pipeline in May 2021 highlighted a surprising new business model: ransomware-as-a-service. The attack halted the operations of the Colonial Pipeline, a central supply route for the southeastern United States that provides nearly half of the East Coast's fuel needs.

In these cases, the business model might stay the same, but the moral tinge of the product or service changes.

the problems of people and planet [and] not to profit from producing problems for people or planet", that might help rule out EBMs.

But are there business models that not only have no redeeming features, but actually make the world worse, while still profiting their practitioners, such as extortion or ransom? How about websites that post names and mugshots harvested from police websites? There are several such sites online, and many of them have excellent search engine optimization, meaning that if you search someone's name online and they have a mugshot somewhere in their past, it appears high in the search results. Being arrested and having a mugshot taken does not mean that someone has been found guilty of a crime: consider mugshots of Martin Luther King Jr after his arrest at righteous protests.

But prospective employers or dates may not make this fine distinction.

The revenue model? Charge people to remove their mugshot from the site.

Declaring a purpose that meets these standards might help. Then again, we should never underestimate the sophistry of PR firms in coming up with a plausible-sounding purpose. Surely an opioid producer would state its purpose as "alleviating human suffering". A producer of hyper-processed foods that incline their consumers toward obesity and diabetes might choose "nourishing the world". A vaping company could go with "helping wean smokers off cigarettes". A social media company that hosts genocidal hate groups or insurrectionists? "Enabling people to build community."

What about pharmaceutical companies that market addictive opioids by persuading pliable physicians to prescribe them for off-label use?

Companies adopted variants of this EBM, which has been largely responsible for an unprecedented decline in the life expectancy of Americans over the past generation. According to the New York Times, “Overdoses, fueled by opioids, are the leading cause of death for Americans under 50 years old — killing roughly 64,000 people last year, more than guns or car accidents.” Some entrants into this industry segment were very clear from the start that off-label uses of their highly addictive products were essential to their enterprise's profitability.

‘The profit motive, it seems, can often generate businesses that leave the world worse off’ Or consider vaping companies that market candy-flavored nicotine pods to teens and tweens by advertising on websites aimed at children.

As I write, one in four high schoolers in the US has vaped in the past month, and one in 10 middle schoolers (children aged 11 to 13).

One growth industry during the pandemic was the hosting of a web-based marketplace where students who don't want to study can find freelancers to complete their assignments and tests for them. This business model may be evil, or merely unethical, but it evidently is not illegal, as there are several competitors offering this service. There are, it seems, many kinds of business that are difficult to redeem.

Several scholars associated with the British Academy, a fellowship across the humanities and social sciences, have proposed corporate purpose as a way to ensure that corporations are constitutionally bound to pursue human-serving ends. Optimistically, if corporations were required to declare a purpose, "to produce profitable solutions to

And even DarkSide is attentive to its reputation, claiming: "We are apolitical, we do not participate in geopolitics, do not need [sic] to tie us with a defined government and look for other our motives. Our goal is to make money, and not creating problems for society." By including this last clause, they would have met the British Academy’s definition of purpose.

The profit motive, it seems, can often generate businesses that leave the world worse off. But are there some economic systems that are more fertile than others when it comes to EBMs? Is there an institutional terroir that is especially conducive to breeding monsters? Authorities investigating the Colonial hack are confident that DarkSide is a Russian organization, with no evident government connection. Prior instances of hacking-for-profit seem to be particularly prevalent in certain Eastern European settings.

But if I had to name a country that seems to specialize in incubating morally troubling business models, there is a different place that stands out. In a recent article entitled Capitalism Needs to be Re-encapsulated, Amitai Etzioni, the Israeli-American sociologist, lays out the case: rapacious pharmaceutical companies that market their wares with abandon; badly run for-profit prisons, schools, and nursing homes; financial institutions that will securitize anything, including life insurance payoffs of the elderly and terminally ill. A veritable buffet of wrongdoing. Sound familiar? I’ll leave it to you to work out where these particular evils reside. ■

Jerry Davis is the Gilbert and Ruth Whitaker Professor of Business Administration and Professor of Sociology at the University of Michigan’s Ross School of Business and is a Fellow at Stanford University’s Center for Advanced Study in the Behavioral Sciences. He has published widely in management, sociology and finance and his current book project examines corporate power in the 21st century, and how to tame it.

June 2021 • I by IMD 5

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6 I by IMD • June 2021